Moody’s reports that commercial prices are bumping up and down along the bottom right now.  Some months prices are up a bit, and others they are down.  In June prices dropped 4% is what Moody’s called a “choppy drop.” The prices are still higher than they were at the height of the recession in October 2009.  Overall commercial prices are 41.4% below their peak recorded in October 2007.

Moody’s believes that in the commercial market buyers and sellers are beginning to agree on prices that will sell and that should bode well for increasing transaction volume, even if prices bounce around a bit near the bottom in the coming months.

Is the Commercial Market At Bottom Yet? is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

In an effort to motivate homeowners who have lost hope as their mortgage fall more and more behind, Financial Asset Services, Inc. is employing licensed REO and Short Sale Agents around the country to knock on doors in order to communicate options directly to homeowners in distress.

If they are able to engage the homeowner in a dialogue they outline options for Short Sale and Deed-in-Lieu of Foreclosure available through the mortgage lender.  Since they are representing the Lender, they must stay compliant with all regulations in the Fair Debt Collection Act.

FAS is finding that door knocking is an effective way of getting to those homeowners who have stopped responding to mail and phone calls about their delinquent mortgage.

Financial Asset Services is Door Knocking for Short Sales is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

Only 331,000 of the 975,000 loan modifications that have been completed to date have been written under the federal government Home Affordable Modification Program (HAMP); the rest are the result of proprietary loan modifications from servicers and lenders.

What happens to borrowers when their modifications are turned down by HAMP?  In 45% of the cases the Lenders work out a proprietary modification.  Another 2.4% end up selling their homes through a Short Sale.  About 3% file for bankruptcy, thus delaying any final resolution on the home.  Another 10% end up losing the home to foreclosure.

The Treasury Department report on the program notes that there are wide discrepancies between servicers on what happens to those who request a modification.  To a large extent, it is the luck of the draw as to whether a loan modification will be successfully completed.  The loan modification process has, on the whole, slowed the progress of foreclosures.

A Total of 975,000 Loan Modifications are Completed is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

A new study by Trulia finds that the dream of owning a home is fading into the background for more and more Americans.  The study reveals that one in four renters never plan on buying a home.  Additionally 68% of the other renters believe that home ownership is at least two years away. Many of these people expressed that uncertainty about the economy is affecting when they will begin to look for a home to buy.

Since absorption of the current glut of homes on the market is critical to recovery, this trend away from renters expecting to jump into the market is expected to drag out the housing slump well into the future.  As the housing market goes, so goes the economy.

Trulia’s CEO, Pete Flint, believes it is critical for the government to turn its attention to job creation and retention, as well as to the drive to stem foreclosure.

Trulia Finds American Homeownership Dream is Fading is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

Employers are continuing to do more with less, and the outlook for adding back employees is rapidly fading.  It appears that if the economy is going to recover, it will do so without the participation of the job market.

Two weeks ago unemployment claims pierced a psychological barrier of 500,000 claims.  The high unemployment figure comes despite evidence that private business is beginning to add jobs.  Economists have been confused by the conflicting evidence of private gains and overall losses.

From a policy perspective, one of the most difficult concerns is what the government should do about the long term unemployed.  The Emergency Unemployment Claim Program was established in June 2008 to deal with those who are still unemployed at the end of the 24 week compensation period.  That EUC fund was recently extended to Nov. 30 as the numbers as of July 31 surged to over 4.7 million.

This morning the national unemployment rate rose to 9.6%.

Jobs Outlook Going from Bad to Worse is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

JP Morgan Chase has added 8,000 loan officers and other staff to help process loan modifications more quickly with the intention of significantly reducing the number of its loans that go into foreclosure.

In the most heavily impacted areas Chase has loan officers on the ground to conduct face to face counseling sessions with clients.  It has met with 140,000 mortgage holders since it opened its centers in 2009 and has modified 900,000 loans using a combination of HAMP and its own proprietary system.  Of these total modification applications, 214,529 mortgages have been modified permanently.

The teams that handle Short Sales and Deed-in-Lieu programs have also been enlarged so that those who do not qualify for a modification, or fall out of the program can be considered for these strategies as the next step in the process toward stopping foreclosure.

Chase Adds Staff to Expedite Loan Modifications is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

Despite being heavily hit by mortgage defaults the saving and loan industry is again making a profit.  For the fourth consecutive quarter the industry reported profits.  In the 2^nd quarter of 2010 those profits were $1.49 billion. The profit balance is up from a $94 billion loss in the 2^nd quarter of 2009.

Community banks by law must reserve 65% of its lending for mortgages and consumer loans.  This has made the role of the thrift institutions very precarious during the housing crisis.  The Office of Thrift Supervision considers 16 thrift institutions to be less than adequately capitalized right now.

Still, with the steady stream of profitable quarters the industry as a whole appears to be on the mend.  Troubled assets are falling and are now down to 3.21% of all assets, down from 3.28% the previous quarter.

Thrifts are Recovering from Housing Crisis is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

The tide appears to be turning on the number of mortgages that exceed value.  CoreLogic has calculated that 11 million homes have loans outstanding that are more than the value of the home, or 23% of all outstanding loans on residential properties.  That’s the good news.

The bad news is that almost all of the change occurred because of foreclosures that have sent values back to earth, not because of appreciable gains in market value.

When loans that have only 5% or less of equity are added in, the total of underwater loans is around 28%.  Interestingly, in markets where few homes are underwater, values rose .5 to 1%, while in markets where underwater mortgages are very prevalent, values actually fell across the board.

The negative equity problem is concentrated in five states: Nevada (68% negative equity in the second quarter); Arizona (50% negative equity); Florida (46% negative equity); Michigan (38% negative equity); California (33% homes under water).

Underwater Mortgages Decline for Second Consecutive Quarter is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

Delinquencies on first mortgages declined slightly between July and June, down from 3.3% of all 1^st mortgages to 3.2%, according to Standard & Poor’s and Experian’s combined index.  The bad news is during the same months delinquencies on 2^nd mortgages rose from 2.4% to 2.8% of all mortgage 2^nd loans.

It is too soon to tell if this is a momentary aberration or a new trend.

A larger study of delinquencies, the Mortgage Bankers Association quarterly survey, came out this past week and the more complete picture looks like this: Foreclosure starts have gone down for the first quarter since 2006.  Loans 90 days or more late have also decreased.

The aberration noted by the MBA is that 30 and 60 day lates are again surging, and it is feared that this may portend another round of higher foreclosure levels in the future.

At the end of the 2^nd quarter 13.97% of all home mortgages were at least one payment overdue or in foreclosure.  That’s $963 billion in troubled home mortgage assets.  The percentage drop from the 1^st quarter was .04%.  The MBA reports that foreclosure starts have dropped for all types of loans, and fell quite substantially, down .12% from last quarter and .25% from the same quarter of 2009.

Forty three states saw an improvement in the foreclosure picture, with the largest drops in California, Florida and Nevada.  Eleven states saw an increase over last year, with the largest increase coming in Illinois, South Dakota and New Mexico.

The 30 day delinquencies are very closely tied to claims for unemployment insurance. When unemployment claims go up, the delinquencies rise; when the claims go down so do the mortgage delinquencies.  Since unemployment claims have begun to rise again it is not unusual that we are also seeing a rise in delinquencies.  The one factor that will bring down delinquencies and ultimately foreclosures will be a substantial drop in the unemployment rates.

Delinquencies Going Up for 2nd Mortgages–Down for Firsts is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

It’s relatively easy to complete two or three Short Sales per year.  All it takes is convincing one or two good Agents in your area to work with you on Short Sales and a good negotiation service.  It’s another ball game entirely to keep deals flowing constantly in the pipeline.  Here are the most common mistakes that Investors make in scaling up business to that next level:

1.  Failure to systematize.  A pre-foreclosure business that is bringing in a closing or more a month can no longer efficiently be run out of a back bedroom with paper files, a bunch of post-its and a cell phone.  A system organizes all steps in the process and all records into an integrated process that saves steps and can be delegated to members of a team. Usually technology is used to systematize a process.  A home office is fine (many people prefer it), but it must be run as a real business if you want to succeed in the long term.

Aspects of technology that you need to grow your business include integrated systems that help you complete, organize and send off paperwork fast and accurately for Short Sale negotiation, and keep your contact files online (for more information about this, give us a call at 706-485-0162 and ask about The Short Sale Engine).  Your communication system should include either an automated voicemail system with phone extensions for others who are working for you, or a live system that steps prospective buyers and sellers through a series of questions with a live attendant to help you sort out the genuine deals fast.

2.  Failure to delegate.  Many entrepreneurs think they can do it all themselves.  If you look at a flowchart of all the functions required to run a pre-foreclosure business there are at least 75 or 80 different tasks and activities from lining up Agents and sending out letters to homeowners, to marketing for end Buyers, to receiving a check at closing.  How many of those tasks do you really need to do yourself?  The answer to that question will be based partly on your time, skills and interests, and partly on which are the most critical tasks to making money.  Personally do those things most important to making money: setting the vision and the goals for the company; finding Agent partners; finding private money; approving deals; cashing the checks; analyzing the system and making it better; hiring and retaining staff and consultants.  Then take on the things that you really enjoy doing and actually have the time for.  Virtually everything else can and should be done by someone else.

3.  Failure to keep a deal flow going.  Many new Investors will get a few deals under their belts and then rest on their laurels.  If deals from an established connection peter out, business dies because the Investor fails to constantly make new connections. After running one pre-NOD list they fail to send out more than one notice to that list, or to follow up with new lists every month.  They fail to explore new markets—new neighborhoods within one city, new cities, or even new states where the pre-foreclosure market may be more promising. You need to be constantly expanding your reach to build an ever-expanding network of Buyers, Sellers, Private Lenders, Agents, etc.  You’re either expanding or you are dying.

Now go out and sell some houses!

3 Mistakes Investors Make in Scaling Up their Businesses is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

Just when you thought they couldn’t get any lower, mortgage rates declined again setting lows for 9 of the past 10 weeks.  Freddie Mac reported the 30 year rate to average 4.36%, down .7% from a week ago. The 15 year rates averaged 3.86%, down .04%.  The 5 year ARMs are at 3.56%, which is tied for the lowest recorded by the GSE.

The Bankrate average for the 10 largest banks and savings and loans this past week was 4.59 for 30 year fixed rate loans, down from 4.63 the previous week. The 15 year rate for these large lenders was 4.08, down .03 point from the week before.  Jumbo loans are at a record low of 5.22%. The Bankrate number for 5 year ARMs was 3.85%.

Mortgage Rates Continue to Decline is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

TransUnion reports that more mortgages are 60 days or more behind as of the end of the 2^nd quarter compared to the 1^st quarter of the year, but the numbers are smaller than they were in 2009.  A total of 6.67% of active mortgages were behind by 60 days at the end of June. That’s up from the 1^st quarter rate of 5.81%.

The other bit of good news is that the rate of increase is slowing compared to a year ago.  Additionally, there were only 12 states with increased delinquency rates over 2009 2^nd quarter, while last year virtually all states were in worse shape for delinquencies.  This data may indicate that a trend is just getting started toward lower delinquencies and hence fewer foreclosures in the future.

Realtytrac reports that more banks are stepping up the repossession process for homes with bad loans compared to a year ago.  The number of American homes lost to foreclosure in July was 6% higher than in July of 2009.

The Good News/Bad News about Mortgage Delinquencies is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

The Weiss Money and Markets team last year predicted that there would be a massive shift of world wealth from Western countries to Asia because so many Western countries are debt-ridden.  That shift is, in fact, happening, according to the Weiss research team.  This team has been right before in predicting recessions and bear markets. Here are a few of the team’s predictions for the remainder of 2010:

1.  The Obama administration will be unable to get another stimulus passed and will not be able to prevent a double-dip recession.

2.  The only deficit fighting that will be done will be by the Federal Reserve and the European Central Banks, and they will be focused on printing more money.

3.  The sovereign debt crisis will worsen and engulf first Eastern Europe, then Western Europe and the U.K., and also the U.S.

4.  Ultimately the U.S. debt problem will become worse than it has been in Greece. It will ultimately reach 400% of GDP.  This year the U.S. debt will be at 90% of GDP and next year it will be at 95% of GDP.

5.  The growth in China is now at least 4 times larger than it is in the U.S. or Western Europe.  China’s debt load is small and its reserves are huge.

Shift of Wealth to Asia in Full Swing is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

So far the HAMP program has been disappointing.  While over 1.3 million have been approved for trials through July 2010 only 616,839 trials have actually turned into permanent loan modifications. A total of 255,954 trials are still active and will be decided upon in the next couple months for whether they will become permanent.

The problem seems to be that many trials were approved without income verification.  When the homeowners have been faced with turning in paperwork to move the trial into permanent status, many have had difficulty coming up with the complete documentation, while others have failed to show adequate income to proceed with the permanent loan modification.

There is a silver lining.  About half of those who have fallen out of the HAMP program have gotten help through other programs or have become current on their payments.

HAMP’s Disappointing Results is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

At this time there are 13 states with non-recourse laws on the books that protect walk-away Homeowners from being pursued at least by the first mortgage-holder after a Short Sale or foreclosure.  They are: Alaska, Arizona, California, Connecticut, Florida, Idaho, Minnesota, North Carolina, North Dakota, Oregon, Texas, Utah, and Washington.

Those with HELOC second mortgages, or who own second homes or investment property with delinquencies, however, may not be protected for these loans.  In addition, loans made for properties in the other 37 states may face a nasty surprise at the completion of a Short Sale or Deed-in-Lieu as the Lender may go after the deficiency with a judgment, or they may sell the deficiency to a third party collection company to go after the remainder of the loan.

In addition, it is not just the original Lender who may decide to obtain a judgment for the deficiency.  If the mortgage includes private mortgage insurance, the pmi company may decide to sue for the deficiency.

So, even when the mortgage company agrees not to pursue a deficiency judgment with the Short Sale or Deed-in-Lieu of Foreclosure approval, your clients can’t be absolutely sure that no one will come after them for the loss. The mortgage insurance may come after at least a part of the loss, since they will most likely be required to pay out for at least some of the loan loss.

The decision whether to pursue a deficiency will often depend on the Lender’s assessment of whether the Homeowner has resources to go after.  This is more likely the case when the default is on an investment property or second home, but average Homeowners can be targeted as well, especially in states where there is recourse.

The moral of the story for Agents and Investors is to never promise the Homeowner that they can negotiate away a deficiency judgment.  Unless the Homeowner has been discharged from a bankruptcy listing the property as one to be given up in the bankruptcy, there just is no guarantee that some lien holder won’t come after the difference between the mortgaged amount and the sale price.  Even for those properties in a non-recourse state, it is best not to make promises you might not be able to keep.   In many cases a short sale is the best option for the homeowner, but make absolutely sure you are open and honest about the deficiency with your prospective short sale clients.

Those Pesky Deficiency Judgments is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

The gorilla in the loan restructuring market is Bank of America.  The number of permanent loan modifications BOA has completed under the HAMP program is 76,000 through the month of July.  BOA has written over 100,000 non-HAMP modifications.  Altogether 665,000 loan modifications of one type or another have been completed by BOA since January 2008.

BOA claims that when a loan modification cannot be worked out it is enhancing its options for a “dignified” end to homeownership through Short Sale or Deed-in-Lieu of Foreclosure.

During the second quarter BOA completed 25,000 Short Sales.

Bank of America Leads in HAMP Modifications is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

Last week the Federal Reserve Bank issued new rules designed to protect consumers from unfair and deceptive mortgage lending practices.   The new rules go into effect in April 2011.

Mortgage brokers may no longer receive compensation based on the interest rate that the consumer receives on a loan, a practice called “yield spread premiums.”  This practice led to bait and switch practices where borrowers were offered one rate initially and then forced into a higher rate at the end. This practice was blamed for leading homeowners into high cost, unsustainable mortgages.

Loan originators may no longer accept compensation both from the Borrower and from the Lender.  They must also refrain from advising clients into loans that are not in the Borrower’s best interest.

For variable rate loans mortgage brokers will need to present to clients a table that shows the “worst case” scenario on what the interest rates could do to mortgage payments.

As of January 2011 consumers must be notified within 30 days of any sale or transfer of their mortgage to another Lender.  Notification must also take place when key terms of the loan are changed.

Fed Issues Mortgage Disclosure Rules is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

CoreLogic indicates that, while home values are up nationwide in June for a fifth consecutive month, the increase is far less dramatic than in past months.

Home prices, including distressed sales, increased year-over-year by 1.4% in June, but this was a 2.3% deceleration from May.  The decline was most pronounced for the most expensive areas, and in areas already very impacted by distressed sales.

Prices are expected to further decline throughout the fall, since the price support efforts of the government have largely run their course.

States with the highest appreciation during June were: South Dakota (6.9%); Maine (6.4%); California (5.9%); Virginia (4.7%); Washington DC (4.3%).  States with the highest depreciation in June were: Idaho (-9.1%); Alabama (-3.8%); Oregon (-3.5%); Washington (-3.4%).  The total change from the peak of the market in April 2006 to June 2010 is -28%.

Home Price Increases are Sharply in Decline is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

Fannie Mae is making it clear to its underwriters that a homeowner’s ability and willingness to repay is of primary concern in approving loans.  All debts, including the proposed loan, must be disclosed and considered in awarding a loan.  If there are changes that occur during loan origination, Fannie Mae expects underwriters to find out about it.

Fannie Mae insists that its new requirement does not imply that a second credit check will always be pulled.  New underwriting will only be required if new information from the borrower is discovered that makes the debt-to-income ratio go above 45% or to increase by 3% or more.  The guidelines are leading to lower default rates, according to Fannie Mae executives.

Fannie Mae: Ability to Repay is Important Lending Criteria is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.

From Houston, TX to Naples, FL the impact of the Gulf Oil spill is having a negative impact on home sales, even though very few beachfront communities have actually experienced oil landfall.  The fear that this or another oil spill could affect the beach is just another reason for potential homeowners along the Gulf Coast to stay away.

Clear Capital has been studying the impact of the oil spill and finds that it has depressed already low property values along a wide swath of the Gulf Coast and virtually halted sales.

The coast of Alabama through the Florida Panhandle, the area most impacted by the BP Oils spill, has seen the greatest impact on housing prices and sales.  Home sales in Mobile, Alabama fell 25% in June compared to a year ago.  Home values along the Alabama coast have fallen 5 to 15%.

Panama City, FL declined 32.5% in sales volume in June compared to the same time in 2009.  Before the oil spill Panama City was on the mend, seeing a 10.7% increase in sales for April compared to the same month the year before.

Even in unaffected areas such as Houston, New Orleans, Naples and St. Petersburg, home sales have fallen since the oil spill in June.  St. Petersburg home sales fell 8.8% compared to the previous June after several months where home sales were on the rise.  Similar stories are playing out throughout the Gulf region.

Gulf Oil Spill is Gutting Home Sales Along Coast is a post from: REWealthCoach.com, Bob Massey's site for real estate investment news, information, tips, videos and podcasts. Visit today! All material is copyright © 2010 Foundation Publishing, LLC.